Greece Activates Bank Rescue Fund to Create New Proton Bank

Oct. 10 (Bloomberg) -- Greece's central bank activated a rescue fund set up under an EU-led bailout in May 2010 to restructure Proton Bank SA, with the Hellenic Financial Stability Fund becoming its sole shareholder.

Athens-based Proton will reorganize into a new lender called New Proton Bank which will have a 10.6 percent capital adequacy ratio, according to an e-mailed statement from the Greek Finance Ministry today. A separate Bank of Greece statement said the capital adequacy was well above regulatory thresholds.

Setting savings banks straight

Of the $17 billion secured by FSC for savings banks, $9.5 billion was used.

With eight suspensions and investigations into management scandals, savings banks have been a source of drama in the first half of 2011.

When Korea’s top regulator announced a series of measures to normalize the ailing sector during the latter half of the year on Monday, the “financial stability fund,” a new source of capital to prop up savings banks, drew notice.